Bharat SainiLast Updated on November 19, 2014 by Bharat Saini
The results are starting to show of the government’s Help to Buy scheme, with a positive impact on Yorkshire and Kirklees securing long term promise for the future of the North. 18 months after the scheme was first announced in April 2013, first time home buyers are now about to get on the property ladder with only a 5% deposit. But what exactly is Help to Buy and why is it a good thing for Yorkshire? Let’s take a look at the details and implications.
How Does it Work?
Help to Buy is broken down into two main schemes, one of which is targeted specifically at new build properties, and the other which allows first time buyers to bid for new builds or existing ones. The first is the Equity Loan, whereby the government provides the potential homeowner with a loan of 20% of the property value. Combined with the buyer’s deposit of 5%, this leaves them with only a 75% mortgage for lenders to cover, making it much more feasible for families to make that first step on the ladder with a new build.
Meanwhile, the Mortgage Guarantee extends to existing properties throughout the UK, and in this scheme the government will guarantee up to 15% of the value of the property to make the mortgage more secure. The buyers will still have a 95% mortgage if they put down a 5% deposit, however the risk on the lender’s behalf is lessened with this guarantee.
What Does it Mean?
Since the scheme was launched, thousands of new homeowners have been created throughout Yorkshire, with hundreds of first time buyers benefiting in Huddersfield and the surrounding areas. 256 households have bought a property with this government assistance in Kirklees, http://www.examiner.co.uk/news/west-yorkshire-news/help-to-buy-boost-8027836 creating a new generation of home owners who have given the property market a boost. This will be further enhanced if they decide the climb the property ladder in the future.
The importance of new builds in the scheme has also given a significant lift to the construction industry in Yorkshire, which had been experiencing a lull for years before Help to Buy came into force. Along with the growing government interest to invest in the North with plans such as the high-speed rail service, it is an exciting time for the region as the UK turns their focus away from the South in recognition of the huge potential of northern investment.
The long term implications of this new generation of homeowners is hard to underestimate, and is great news for the construction industry, property owners looking to sell, and of course young families and couples seeking to buy their first home. If you are looking to move away from rented property and take your first plunge into the property ladder, find out more about the Help to Buy scheme http://www.helptobuy.org.uk/ and visit your local estate agents to get professional mortgage advice. Are you ready to take the plunge and own your own home?
This article was written by Kelly Gilmour-Grassam, a freelance copywriter from Yorkshire. Kelly can be found on Twitter at @KellygGrassam. This article was written with helpful information from ADM Residential.
